What is the relationship between niche and performance? We identify two types of niche positions-product niche and process niche-defined by the extent to which a firm offers distinctive products and has distinctive operational processes, respectively. We argue that the effect of each niche on firm performance is contingent upon network embeddedness-the extent to which a firm is involved in a network of interconnected inter-firm relationships. Using data covering the period 1995-98 pertaining to venture capital firms and their holdings in initial public offerings (IPOs), we show that both product niche and process niche interact with network embeddedness to determine firm performance. Our findings suggest that the extent to which a firm offers distinctive products or processes will be more positively associated with firm performance when network embeddedness is high. CopyrightA key to understanding inter-firm competition is the concept of niche. A niche represents a firm's distinctiveness relative to other players in the competitive arena. As such, a niche describes not only a firm's competitive environment, but also how it competes with others (Carroll, 1985). A niche allows a firm to establish differences by offering a product or set of products that few, if any, other firms offer (Porter, 1980;Stuart, 1998), or by doing business using operational processes that few, if any, other firms practice (Baum and Oliver, 1996;Carroll, 1984Carroll, , 1985.1 Firms in a niche Keywords: network embeddedness; product niche; process niche; venture capital * Correspondence to: Ann Echols, Smeal College of Business Administration, Pennsylvania State University, 403 Business Administration Building, University Park, PA 16801, U.S.A. E-mail: aiel@psu.edu 1 Obviously, a firm could maintain a number of different niches, including both a product and process niche, but for the purposes of this paper our study is limited to the concept of firms in a single niche-either a product or process niche.(niche-firms) thus create value by way of offering products or practicing processes that differ in some significant way from those of rivals. The concept of niche has attracted considerable interest in management research. Population ecologists have examined properties of a firm's niche (Hannan and Freeman, 1977;McPherson, 1983) and the impact of a niche position on competitive dynamics. For example, in a study of the worldwide semiconductor industry, Podolny, Stuart, and Hannan (1996) have shown that niche-firms have enhanced firm survival rates. Strategic management scholars have also identified the niche position as a way of competing in the marketplace. For example, in studying strategic groups, Harrigan (1985) investigated the heterogeneity of strategic positions among firms and emphasized the value of holding a distinctive position in an industry. Drawing extensively from industrial organization economics, Porter (1980Porter ( , 1996 has analyzed competitive positioning of firms and argued that niche-firms can justify charging higher pr...
By more closely examining the structural “support” necessary to enhance corporate entrepreneurship ‐ that is, to enhance the entrepreneurial behaviors of a firm’s employees ‐ firms may increase their success with innovation. We specifically suggest that enabling employees to detect, facilitate and pursue opportunities while fostering an organic, organizational structure with shared vision and values increases a firm’s breadth and depth of commercialized innovations. Our rationale for these proposed relationships, as well as suggestions for implementing an entrepreneurial corporate structure, are presented.
Environmental certifi cation is playing an increasingly important role in the strategies of many businesses. This is due in large part to consumer demand for environmentally friendly products. Little is known, however, about why executives adopt environmental certifi cation for a product or process, or how they view the benefi ts and challenges of certifi cation. This paper seeks to advance our knowledge in this area by exploring executives' perceptions of benefi ts and challenges associated with adopting an environmental certifi cation program. We surveyed executives in the kitchen cabinet industry about a second party certifi cation scheme initiated for producers in that industry. Results suggest that perceptions of the benefi ts and challenges of environmental certifi cation differ signifi cantly based on whether the company had or had not adopted the certifi cation scheme in question. The paper considers the implications for companies considering adopting environmental certifi cation as well as for organizations providing certifi cation schemes.
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